No, I don't think that Audi has overtaken BMW. The current M3 triumphs over the much newer RS5 in nearly every comparison test. The 1M thrashes the TT-RS. And if you want a taste of artificial steering you should drive the new S4.
I think that it's closer than ever in the large
performance saloon category, specifically. The M5, Panamera, E63, S models, XFR, etc. all seem legit options.
I am very anxious to see what ///M does with the F80 M3. They seem to be on the right path with it. (EDIT: Given current restrictions.. I'd much prefer an updated S65 + 100 hp